An earthquake that struck the California wine country north of San Francisco and flooding in the U.S. last month caused more than $4 billion in economic losses, according insurance broker Aon Plc.
A 6.0-magnitude temblor shook the city of Napa on Aug. 24, damaging more than 1,100 buildings, injuring at least 258 people and causing about $2 billion in economic damages, the London-based broker said today in a report. Insured losses are expected to be in the hundreds of millions of dollars, because of the below-average extent of coverage, Aon said.
“Residential earthquake insurance penetration rates have gradually lowered in California during the past two decades from 33 percent in 1996 to roughly 10 percent today,” Steve Bowen, associate director and meteorologist for Aon Benfield Impact Forecasting, said in a statement. The Napa quake “serves as a reminder of the unpredictability and costly impacts.”
Napa County is home to one of California’s best-known wine-growing regions and is dotted with boutique hotels and inns that cater to tourists. Damage from the quake could cause those businesses to lose revenue.
The U.S. also suffered more than $2 billion of economic losses from severe flooding in Midwest, Northeast and Mid- Atlantic states, Aon said. Two-months worth of rain fell in the Detroit area in just 24 hours in August, damaging homes. Baltimore and Long Island, New York, also experienced flooding during the month, the firm said.
Outside the U.S., an earthquake in southwestern China killed more than 600 people and caused at least $6.3 billion in damage, according to the broker. Temblors also struck Peru, Ecuador, Algeria and South Africa.
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